The Ibovespa rose from a 15-week low as Gafisa SA led homebuilders higher on speculation the central bank will end borrowing cost increases that pushed Brazil’s benchmark rate up the most in the world this year.
Footwear maker Arezzo Industria e Comercio SA rose the most in a month as Bank of America Corp. raised it to buy. The BM&FBovespa Real Estate Index snapped a four-day decline. Itau Unibanco Holding SA, Latin America’s biggest lender by market value, climbed after its board of directors approved a plan to buy back shares.
The Ibovespa rose 0.5 percent to 50,279.61 at the close of trading in Sao Paulo, with 36 stocks higher and 33 lower. The real strengthened 0.1 percent to 2.3278 per U.S. dollar at 5:33 p.m. local time. Brazilian swap rates fell after economists cut their 2013 and 2014 growth forecasts, adding to speculation that policy makers will limit increases in borrowing costs.
“Signs are mounting that the central bank will soon be done with the monetary tightening, which could give a boost to equities,” Pedro Galdi, the chief strategist at brokerage firm SLW Corretora in Sao Paulo, said in a phone interview.
Policy makers have raised borrowing costs by 2.75 percentage points since April to curb inflation. Analysts covering Latin America’s largest economy cut their median forecast for 2013 growth to 2.30 percent from 2.35 percent, according to a weekly central bank survey published today. They reduced their median estimate for 2014 expansion to 2.01 percent from 2.10 percent.
Gafisa added 3.5 percent to 3.60 reais. PDG Realty SA, Brazil’s second-biggest homebuilder by revenue, rose 1.7 percent to 1.81 reais. Arezzo gained 3.1 percent to 30.05 reais. Itau climbed 0.7 percent to 31.17 reais.
Investors are also looking for signs about the timing of stimulus cuts in the U.S., Galdi said. The Federal Reserve may begin reducing its $85 billion of monthly bond purchases at its two-day policy meeting starting tomorrow, according to 34 percent of economists in a Dec. 6 Bloomberg survey, up from 17 percent in a Nov. 8 poll.
Cia. Siderurgica Nacional SA, the steelmaker known as CSN, rose 4.2 percent to 13.10 reais after Goldman Sachs Group Inc. raised it to the equivalent of hold.
Via Varejo SA’s units jumped 8.3 percent to 24.90 reais in their first day of trading in Sao Paulo after the retailer’s shareholders sold the securities in a public offering last week for a price below the bottom of their target range.
The Ibovespa has dropped 28 percent in dollar terms this year, the worst performance among the 20 biggest equity indexes tracked by Bloomberg, on concern Brazil’s economic recovery will falter and reduced monetary stimulus in the U.S. will curb demand for emerging-market assets.
Trading volume of stocks in Sao Paulo was 6.11 billion reais today, data compiled by Bloomberg show. That compares with a daily average of 7.45 billion reais this year, according to the latest data available from the exchange.